TaxTMI 
TaxTMI 
2011 (2) TMI 1154
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....lowed the Cenvat credit to M/s. Saluja Exim to the extent of Rs. 15,98,385/- and while imposing the penalty of equal amount, had also demanded interest on the amount due. The Jt. Commissioner by his another order of the same date had disallowed the credit to the extent of Rs. 19,45,955/- while imposing penalty of equal amount and confirming the demand of interest against M/s. Saluja Exim Ltd. (now M/s. SEL Manufacturing Co. Ltd.). 3. By the said orders passed by the Jt. Commissioner, the credit sought to be availed by the assessees by taking resort to Rule 9A of the Cenvat Credit Rules read with notification No. 35/2003-C.E. (N.T.), dated 10-4-2003 and notification No. 47/2003-C.E. (N.T.), dated 17-5-2003 was sought to be disallowed on the ground that the inputs and the goods in respect of which the credit was sought to be availed were not lying in stock of the assessee as they were already removed from their factory premises and were lying in the port area. The Commissioner (Appeals) while setting aside the said orders held that the credit, in terms of said provisions of law, was available irrespective of place where goods were stored whether in the factory premises or in ....
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....ate for the respondent, on the other hand, taking us through Rule 9A of the said Rules, the said circular dated 20-3-2003 as well as Circular No. 703/19/2003-CX., dated 20-3-2003 and the notification in question submitted that prior to 1-4-2003, the garments were not subjected to payment of duty and therefore, there was no question of goods being removed by following any procedure regarding payment of duty. He further submitted that perusal of both the circulars would apparently disclose that the goods which are stored in the factory premises or even in the some other premises undisclosed to the department can also be considered as the 'goods lying in stock'. Otherwise Circular dated 20-3-2003 would not have required the assessee to declare the address of the premises where the goods are stored in addition to already declared premises. He further submitted that both the Circulars specifically refer to the stock lying "with the manufacturer" and not at the unspecified premises as such which would disclose that all the goods which were under the control of the assessee on 31-3-03 were eligible for the purpose of claiming the benefit under the said notification. Very fact that the Boa....
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.... issued in exercise of powers under sub rule (3) of Rule 9A of the Central Excise Rules, 2002. 8. Rule 9A of the said Rules was brought on the statute book with effect from 1-4-2003 pursuant to notification in that regard having been issued bearing No. 25/2003-C.E. (N.T.), dated 25-3-2003. The purpose behind the introduction of notification under Rule 9A was that the garment product which are exempted from payment of duty till the end of financial year 2002-2003 was brought within the net of excise duty with effect from 1-4-2003 and therefore, manufacturers were entitled to avail the credit in relation to the duty paid on the inputs utilised in such duty payable final product. In order to enable the manufacturers to use the inputs lying in stock as also at the same time to avail the credit in relation to the duty paid on such inputs, the specific provision was made providing certain facility as regards the inputs in stock as on 1-4-2003. On account of availment of exemption in relation to the final products, the manufacturers were not under obligation to maintain documentary evidence regarding payment of duty on such inputs. To overcome resultant hardship in such situation ....
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....s to be made to store the goods at some other places disclosed to the department, the goods stored at such places, could not be considered as the goods lying in stock. 13. Taking into consideration, the undisputed facts and applying the provisions of law, it cannot be disputed that the credit in terms of the said Rules can be availed in relation to the duty paid on the inputs only in cases where the final product is dutiable and the same is not exempted from payment of duty or is not subjected to nil rate of duty. Being so, as rightly pointed out by Jt. CDR while extending the scope of Rule 9A and the notifications issued thereunder one cannot forget the said basic requirement of law. Bearing the same in mind one has to ascertain the exact connotation of the expression "lying in stock" used in the said Rule as well as in the notification. It can hardly be disputed that the meaning assigned to the said expression used in the notification can not be different from the one which is to be assigned to the same expression used in the said Rule. At the same time, the advocate for the respondent is also justified in contending that the difference between the scope of the said expre....
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....ously therefore, the meaning to be attached to the said expression in the said notification cannot be different from the one to be attached to the said expression used in Rule 9A. 16. The Circular dated 28-3-2003 clarifies that even the goods which were stored in the premises other than the registered one or to be registered premises, the declarant has to give address of such other premises. Similarly, Circular dated 25-3-2003 clarifies that in the case of processed fabrics only the stock lying with the manufacturer would be entitled for availability of such credit. 17. Merely because the circular specifies that even the goods stored in premises other than the registered and to be registered premises that itself cannot be construed to mean that the goods which did not form part of the goods which are to be utilised in the manufacture or in relation to the manufacture of final products which would be subjected to payment of duty would also fall under the expression of 'goods lying in stock' on 31-3-2003. Bearing in mind entire scheme of the Cenvat Credit Rules and the provision in respect thereof while understanding the meaning of different expressions used in the st....